My question is probably of an 'easy fix' however I've been struggling with it for a while! I'm trying to set up an annotation labels for several feature classess in a map and would like them to display proportionally - relatively to map scale. I use ArcGIS v 10.1 and Maplex label engine.

So - as an example, I am working on a regional map at a scale of 1:700K. My annotation on a FC (within GDB) is set to 12pt size. When I zoom in to a larger scale of 1:350K my annotations appear exactly the same size and are consequently tooo big!

I understand one can work with map document annotation or geodatabse annotation. I've seen some posts about setting a data frame reference scale to zero (eg http://forums.arcgis.com/threads/74004-Annotation-labels-at-different-scales), which should make mxd annotations display proportionally to map scale. However cannot seem to add custom reference scale of '0' to the customized list.

I'd greatly appreciate your comments on best practices or any other advices you may have!